Americans need at least $2.2 million in assets to be considered rich, according to Charles Schwab’s 2023 Modern Wealth Survey. The investment platform surveyed 1,000 Americans to determine the average net worth required to be considered wealthy in America. Nearly half of the respondents said they feel wealthy, with an average net worth of around $560,000.
Feeling wealthy was most common amongst Millennials and Gen-Z, with 57% and 46% reporting that they feel rich, compared to just 41% of Gen-X and 40% of Baby Boomers.
The survey shows that wealth to some people means not having to stress about money or having more money than most people they know. Interestingly, many self-reported that experiences, relationships and their career carries as much weight as actual money. The report claims that well-being—not money—is an important measure of wealth. Nearly 70% of respondents said a healthy, flexible work-life balance is a greater driver of wealth than maximizing their earnings.
Despite recent inflation and the rapid rise in costs across the board, the current amount of what’s considered rich is lower than pre-pandemic levels per the 2020 Schwab survey, which found $2.6 million to be the magic number.
The results are somewhat surprising, as the cost of purchasing a new home has risen due to higher interest rates. With inflation causing prices to soar, it takes more money than ever to feel financially secure, especially in cities with a high cost of living.
What To Keep In Mind When Considering How Much Money You Need To Be Rich
Being “rich” is a subjective matter. There is no metric for measuring this. The important thing is to be comfortable with your financial situation and to feel confident that you are on track to achieve your financial goals.
We can’t talk about wealth in a vacuum. You need to take into consideration where you live. Some locations offer a lower cost of living, relatively inexpensive home prices and lower taxes. Large cities like New York or Los Angeles are costly, and taxes consume much of the paycheck.
Priorities impact your wealth. If you have a high-end lifestyle that includes expensive cars, homes and vacations, you will need more money to be considered rich than someone with a more modest lifestyle. Conversely, if you have ambitious financial goals, such as retiring early or leaving a large inheritance to your children, you will need more money to be considered rich than someone who does not have such goals.
Inflation can erode the value of your money over time, so you will need to earn more money to maintain the same standard of living. Your investments can grow over time, which can help you reach your financial goals. However, assets can also lose value, so it is essential to manage your risk carefully. Taxes can take a significant chunk of your income, so it is important to plan for them.
If you are serious about becoming rich, you must start saving and investing early. The earlier you start, the more time your money has to grow. You should also make sure to create a budget and track your spending. This will help you stay on track and ensure you are not overspending.
It is important to remember that being rich is not the only thing that matters in life. Many other things, such as your health, relationships and happiness, are more important.
Source: Forbes
